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S.E.C. v. BILZERIAN
729 F.Supp.2d 9 (2010)
United States District Court, District of Columbia.
November 1, 2010.
Rather than follow those orders, though, Bilzerian and his agents abused the judicial system in a concerted effort to interfere with this Court's attempts to establish the sources and amounts of his assets. To put an end to their frivolous lawsuits, which made progress in this case all but impossible, this Court issued the following injunction: Paul A. Bilzerian, his agents, servants, employees and attorneys, and those persons in active concert or participation with them, who received actual notice of this Order by personal service or otherwise, are prohibited from filing or causing the filing of any complaint, proceeding or motion in the United States Bankruptcy Court for the Middle District of Florida, or from commencing or otherwise causing the commencement of any proceedings in any court, other than in this Court or in the appeals of this Court's Orders to the United States Court of Appeals for the District of Columbia, without prior application to and approval of this Court. Order 2, July 19, 2001, ECF No. 416. That Order, however, did not stem the tide. On May 11, 2009, this Court held Bilzerian and Hammer (who acted on Bilzerian's
behalf) in civil contempt for violating the 2001 order by commencing and prosecuting the following lawsuits: Bilzerian v. Haire, Case No. 08-9149 in the Thirteenth Circuit, Hillsborough County, Florida; Bilzerian's counterclaim and cross claims in Caligula v. National Gold Exchange, Case No. 07-cv-17763 in the Thirteenth Circuit, Hillsborough County, Florida; Bilzerian's miscellaneous action against Ernest B. Haire ("Haire"), Case No. 08-mc-102 in the Bankruptcy Court for the Middle District of Florida; and Bilzerian's commencement of Puma Foundation v. Haire, Case No. 06-9816. Order 1-2, May 11, 2009, ECF No. 986.1 The Court ordered Hammer to purge his contempt "by ceasing his representation of Bilzerian in any capacity in any litigation matters and withdrawing as counsel, if listed as counsel of record, in any of the above cases." Id. at 2. The Court also ordered Hammer to file a sworn statement that he had complied with the order within ten days of the date it was filed. Id. Instead, he waited fifteen days to file a sworn statement that said, among other things, that "he has never represented Paul Bilzerian." Statement of Compliance, May 26, 2009, ECF No. 993. That outright lie was paradigmatic of Hammer's habit of misleading courts. Mem. Order and Op. 11, August 12, 2009, 641 F.Supp.2d 16 (D.D.C.2009), ECF No. 1053. He told Judge Paskay of the Bankruptcy Court for the Middle District of Florida that the show cause proceedings in this Court had already concluded, when in fact they were still under advisement. Paskay Order 12, ECF No. 980. Judge Paskay found that Hammer's "blatant disregard" of the Court's order was "typical and additional proof of Mr. Hammer's litigious nature...." Id. In a separate matter, Judge Paskay characterized Hammer's conduct as "obstructive, defiant and inappropriate" and his suit as an "unethical use of the legal system." See Docket 19, ECF No. 1029. Judge Paskay is not the only judge who has found it necessary to reprimand Hammer, though. Judge Martha J. Cook, in the Thirteenth Circuit, Hillsborough County, Florida, has labeled Bilzerian and Hammer's conduct "egregious," "sanctionable," and "clearly unethical." Cook's Order 10, 12, ECF No. 951. She went on to say that Hammer had participated in "sandbagging, disrupting discovery, and walking down a road that would get him in a lot of trouble." In light of all this, she was "inclined to order him to attend peer review or some sort of remedial training." Id. at 9-12. Then, on August 12, 2009, this Court granted Haire's [998, 999] and Todd Hodges' ("Hodges") [1001] Motions to Show Cause. Order to Show Cause 1, August 12, 2009, ECF No. 1055. The Court ordered Hammer, Bilzerian, and others to show cause, in a writing to be filed with
the Court by September 11, 2009, as to why the Court should not hold them in civil contempt for violating its 2001 Order by pursuing the following additional lawsuits: Bilzerian v. Hodges et al., Case No. 09-ap-93-ALP in the United States Bankruptcy Court for the Middle District of Florida; Steffen v. Hodges et al., Case No. 09-ap-93-ALP in the United States Bankruptcy Court for the Middle District of Florida; Bilzerian v. Haire, Case No. 09-ap-93-ALP in the United States Bankruptcy Court for the Middle District of Florida; Steffen v. Kline et al., Case No. 09-10864CA27 in the Eleventh Circuit Court in Dade County, Florida; and Puma Foundation v. Hodges et al., Case No. 09-CA-02180 in the Circuit Court in and for Hillsborough County, Florida. Id. at 2-3. Hammer filed a response [1062] on September 11, 2009, but he merely reiterated arguments this Court had rejected before. Mem. Op. and Order, 729 F.Supp.2d 1, 5-8, 2010 WL 2771844, **4-6 (D.D.C.2010).
1. This Court, on August 12, 2009, ordered that any portion of the Court's May 11, 2009, order that purported to hold Hammer in civil contempt for his participation in Caligula be vacated. Order 2, August 12, 2009, ECF No. 986. The Court went on to clarify that the order does not require Hammer to withdraw from representing Caligula Corporation. Id. Additionally, the Court ordered that the portion of its May 11, 2009, order that held Hammer liable for attorneys' fees of the National Gold Exchange movants in bringing a motion for an order to show cause be vacated. Id. Finally, the Court ordered that in the third and fifth paragraphs of its May 11, 2009, order, "Bilzerian's miscellaneous action against Ernest B. Haire, Case No. 08-mc-212 in the Bankruptcy Court for the Middle District of Florida" be replaced with: "Bilzerian's miscellaneous action against Ernest B. Haire, Case No. 08-mc-102 in the United States District Court for the Middle District of Florida." Id. The Court's May 11, 2009, order remains unmodified in all other respects. Id. at 3.
2. Hammer also requests that the Court analyze his first motion to vacate under Rule 59(a), but that rule provides for new trials and, as such, is inapplicable here. Fed. R.Civ.P. 59(a).
3. Hammer presents variations of this argument intermittently and in multiple forms in his First Motion to Vacate. At one point, he cites a D.C. Circuit opinion for the proposition that "[w]here, as here, a court's ruling has discretionary elements based on circumstances which are subject to alteration, the law recognizes the power and responsibility of the court to reconsider its ruling if a material change in circumstances has in fact occurred." See First Mot. to Vacate 6, August 9, 2010, ECF No. 1099 (citing Hodgson v. United Mine Workers of Am., 473 F.2d 118, 125 (D.C.Cir.1972)). The problem is that there has been no such material change in circumstances here. The Court based its Contempt Orders on Hammer's blatant violation of its 2001 Order. As discussed above, although Hammer was right to withdraw from the Steffen and Puma lawsuits—as the 2010 Order required him to—that action does not and cannot bring him into compliance with the 2001 Order. The moment he began pursuing the lawsuits he was in out-and-out violation of the 2001 Order, and contempt was appropriate. No circumstances have since changed that merit vacation of the Court's Contempt Order.
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